Blog Posts > New Tax Cut Proposal Isn’t a Tradeoff for PEIA, Would Only Exacerbate Long-term Sustainability Concerns
March 4, 2023

New Tax Cut Proposal Isn’t a Tradeoff for PEIA, Would Only Exacerbate Long-term Sustainability Concerns

For Immediate Release: March 4, 2023

Contact: Kelly Allen, 304-612-4180

Charleston, WV – This week in the West Virginia Legislature reflects politics at its worst. Delegates are being pressured to vote to increase health insurance costs for PEIA members in exchange for a pay raise and a tax cut package. But this isn’t a fair trade at all. The tax cuts themselves would be borne on the backs of public employees and our coal and natural gas communities, transferring wealth upward to the state’s highest income households and ensuring that there will not be enough tax revenue to fund pay increases, PEIA investments, or needed improvements to our schools and other public services in future years.

The tax cut proposals under consideration would overwhelmingly benefit the state’s wealthiest households, not public employees. Two out of every three dollars of the Senate’s income tax proposal would go to the top 20 percent of households, leaving just one-third of the benefits for the remaining 80 percent of West Virginians. And the $750 million+ annual revenue loss from the tax cut plan will make it that much harder to pay for future pay raises, investments in PEIA, or broader investments in public schools and public programs that benefit all West Virginians.

We echo the concerns of the state’s labor leaders that PEIA, a program providing health coverage to 230,000 West Virginians, deserves a permanent, sustainable, and consensus solution with all parties at the table. Tax cut crumbs now are not an exchange for painful austerity and budget cuts in coming years.

For more information, see our recent publication on how any tax cut proposals rely on declining severance tax revenues, a notoriously volatile source of revenue, creating a major risk for permanent tax cuts:

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